What is document management software? Why does business need it?

Regardless of the industry, businesses process enormous volumes of paper and digital documents. In actuality, the typical office worker utilizes 10,000 sheets of paper per year. When you apply this number to a company with 100 or even 500 employees, you can rapidly see how many documents are circulated inside an organization.

These organizations usually perform best when they can use automated processes to handle documents with speed and efficiency and without the hassle of cumbersome manual workflows or difficult-to-locate information.

The chances are your organization's no different. You probably recognize the inefficiencies of managing all this paper, and that tedious manual processes are impacting productivity. You likely also acknowledge that there must be a better way. If you haven't considered document management for your business yet — or you're looking to get more out of document management solutions for your company — start by learning more about this technology today.

Figure 1. What is document management software?

What is document management software?

Document management software (DMS) is a digital solution that helps organizations process, capture, store, manage and track documents. By tightly managing your critical business information, you can develop processes that start, execute and complete in a stable, predictable, measurable way. It is almost impossible to design and implement reliable business processes and digital workflow without fully featured document management software.

Some components of document management software include:

1. The document repository: This is where the documents and associated data are stored. Depending on how you choose to set up your document management system, the repository may reside in the cloud or on-premises. Cloud options are typically more scalable and less expensive, though the regulatory compliance requirements of some industries may mandate that documents are stored on in-house servers.
2. A document viewer: This is one of the main components of the user interface. It's where people can view documents and images on their computers or mobile devices. The best document management software can display PDF, JPG, TIF, CAD drawings and other image versions as well as showing electronic documents in their native formats.
3. Workflow tools: Workflow tools route documents to staff members or teams within your company or to customers or business partners outside of it. The best document management solutions offer options for optimizing and automating workflows to save time and money.
4. Indexing for powerful search: Index data classifies documents and identifies document types. Indexing enables you to move documents through appropriate workflows and find them later. For example, you might need to find an invoice sent to Mr. Smith in July 2020. If documents are indexed by type, account number and date, you can search for all invoice documents from July 1 through July 31 of that year that contain Mr. Smith's account number.
5. OCR capabilities (OCR stands for Optical Character Recognition): This is a technology that converts text from images into data that can be used by business software. For example, an OCR tool might pull all the pertinent information from a resume and load it into an applicant tracking system.
6. Search tools: Search tools let your staff narrow results to find the document they need. Depending on your criteria and how your software is set up, you may be able to search by document type, index values, keywords and full text.
7. Integration options: Integration options let you use your document management system in combination with your accounting software, ERP or other solutions. For example, DocuWare has integrated with more than 500 applications, including QuickBooks, SAGE, Outlook and SAP.

2. Document management in the cloud

Many companies are transitioning from older on-premises systems to cloud-based software-as-a-service (SaaS). This transformation will only continue. The “lightness” of the cloud is driving this trend. In comparison to on-premises systems which require implementation, upgrades and regular maintenance, cloud software deploys quickly and requires minimal internal IT support.

This “lightness” provides many other benefits including the ability to scale up easily as your business grows and better operational flexibility. The results? Improved efficiency, productivity, and agility — all of which help you set a new pace for business.

Figure 2. Total cost of ownership (TCO) of cloud versus on-premises software

3. The cost of cloud is less than on-premises

Cloud software is typically available as a monthly or annual subscription. But it has no upfront license costs and support, and maintenance are built in.

On-premises software requires a large upfront investment in software licenses, plus the cost of the application, IT support and hardware.

Accounting for the annual support and maintenance fee and a typical three-year cycle for new hardware, the overall cost of cloud is less than an equivalent on-premises deployment. Subscriptions to services are operational, not capital expenditures, and are only acquired as the company needs them enabling predictable budget planning.

4. Glossary of document management terms

Before you start shopping for a document management software, learn about some other common terms you might come across.

1. Document capture: Capture refers to the process of getting documents into your document management system. This is accomplished in several ways, including scanning, importing, emailing, capturing faxes directly and entering data into electronic forms.
2. Document imaging: Document imaging is the process of converting paper documents or files to digital ones. Often, this is done through scanning processes, which convert those paper documents to PDF, JPG, TIF or other image types.
3. Document type: Document types are an overarching type that you've set up, such as "invoices," "customer emails," or even "sales" or "customer service."
4. Indexing: Organizes documents in a document management system by allowing you to apply any identifying data, like vendor or customer name, date, amount, and category, or assign broader terms, such as "invoices," "letters," "sales" or "customer service." Index terms define what the document is about. Companies should set up rules for indexing so all employees use the same processes; you can also automate indexing with Intelligent Indexing software which uses machine learning to instantly identify the most valuable information on a document and convert it into highly structured, usable data
5. Version control: Version control is the process of recording changes to documents. If someone makes a change to documents in your system, version control enables you to access previous versions and see when changes were made and by whom.
6. Electronic signature: An electronic signature is captured digitally and appended to a document. In some cases, it's a digital version of a handwritten signature that is signed on a touchscreen with a stylus or a finger. In other cases, there’s an encrypted key that only the designated signatory has access to that ensures that the signature is authentic.

7 benefits of document management systems

Good document management offers many benefits, including bottom-line savings, better customer satisfaction, increased employee morale and easier compliance with federal, state and industry regulations. Check out seven major benefits of document management systems below or browse DocuWare case studies for specifics about how various organizations have used document management to make a positive impact.

1. Reduced reliance on paper storage

Figure 3. Reduce reliance on paper storage

Implementing a DMS is the most important step in creating a paperless office and removing the cost, insecurity, and inefficiency of paper.

Some of the reasons for these savings include:

• Reducing space needs for your document archives. When you go digital, you go from file rooms full of paper to little or no need for document storage space in your office.
• Lower costs of archiving. Paper archives that you must keep for compliance or other reasons cost you money if they’re sitting in a warehouse out of reach. Digital archives are immediately accessible and substantially cheaper to maintain.
• Paperwork costs. When you deal in paper, staff may be constantly printing or copying documents to get things done. When you deal in digital, printing needs are drastically reduced.
• Labor costs. With a document management system, employees can quickly pull up the information they need. No one has to request a file or walk down the hall to the file room to begin a search. Because of this increase in efficiency, there’s usually no need to add staff as your business grows.

2. Easy access to documents on demand

Access to documents on demand does more than cut your labor costs. It can improve employee morale, reduce errors and miscommunication, and substantially increase customer satisfaction.

With the right document management system, employees can quickly find what they're looking for, whether they're working on a research project, caring for a patient or on the phone with a customer about an order.

3. Improved compliance

Easy access to documents — and everything that comes along with it — helps you adhere to regulatory compliance requirements. Here are just some opportunities for better compliance that crop up when you invest in document management:

• Better documentation. When authorized team members, customers, auditors, and others have access to the entire story about a transaction or account, it's easier to prove compliance or find out where you weren’t as careful, so you can address these gaps in the future.
• Permissioned Access. The best document management software lets you control who has access to files and even creates audit logs. This helps you ensure secure information is truly available on a need-to-know or confidential basis.
• Version control. Version control lets you see who changed a document and when they did it. You can see how and when documents were added, moved, or deleted, helping to ensure your records are accurate and compliant.

4. Enhanced team and client collaboration

Figure 4. Enhanced team and client collaboration

Document management systems fully support a collaborative environment, whether employees are working in the office, remotely or on the move. With a third of office workers saying they would likely quit their jobs if remote work is 100% discontinued after the pandemic, systems that ensure collaboration without requiring people to be in the same space are critical.

Here are just a few ways document management software supports collaboration:

• People can view documents at the same time. This helps co-workers discuss projects, account issues and other topics in the most effective manner whether they're doing so over the phone, via video conference or on chat.
• Clients and business partners can see documents on a permissioned basis. You might set up limited access for external users so they can contribute to a project or keep track of what's going on. This supports communication and transparency, both of which are great for customer satisfaction.

5. Options for automation to improve workflow

The best document management software options include automation. Whether it's automated scanning and indexing or the ability to route documents using workflows according to preset rules, these solutions speed up common processes and take tedious manual tasks from your staff’s shoulders. With DocuWare, for example, you can automate common business processes including invoice approval, employee onboarding and records retention.

6. Business continuity for peace of mind

If you opt for cloud-based document management, the peace of mind you gain can be enormous. Top document management providers use redundant data storage to ensure a quick and complete disaster recovery process. Even if your business is hit by a hurricane, fire or other natural disasters, your documents will be safe and accessible immediately.

7. Better overall data security

When you invest in secure document archiving, you make data more available to everyone who should have access to it while reducing the chances that someone who shouldn't see your documents will.

DocuWare – Document management software and workflow automation

Ricoh now offers DocuWare – document management and workflow automation solutions, which have been around since 1988. DocuWare solution allows businesses to digitize documents, manage and work with business data with international security standards in the cloud, at corporate servers or a combination of both. From there, businesses can simplify your existing workflows quickly, focus on your core business and increase competition in the market.

With DocuWare, all procedures, papers, documents are digitized, classified and managed. All retrieval, tracking, approval, and reporting are managed synchronously, automating a single process on one platform with the intelligent help of artificial intelligence and machine learning. Currently, the DocuWare solution is trusted by reputable organizations around the world and the highest security according to international standards.

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